Question
Weltin Industrial Gas Corporation supplies acetylene and other compressed gases to industry. Data regarding the store's operations follow: Sales are budgeted at $390,000 for November,
Weltin Industrial Gas Corporation supplies acetylene and other compressed gases to industry. Data regarding the store's operations follow: Sales are budgeted at $390,000 for November, $370,000 for December, and $380,000 for January. Collections are expected to be 90% in the month of sale, 5% in the month following the sale, and 5% uncollectible. The cost of goods sold is 60% of sales. The company purchases 70% of its merchandise in the month prior to the month of sale and 30% in the month of sale. Payment for merchandise is made in the month following the purchase. Other monthly expenses to be paid in cash are $21,800. Monthly depreciation is $18,000. Ignore taxes.
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Statement of Financial Position | |
October-10 | |
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Assets | |
Cash | $ 25,000.00 |
Accounts Receivable (net of allowance for uncollectible accounts) | $ 71,000.00 |
Inventory | $ 163,800.00 |
Property, plant and equipment (net of $ 504,000 accumulated depreciation) | $1,088,000.00 |
Total assets | $1,347,800.00 |
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Liabilities and Stockholders' Equity | |
Acounts payable | $ 232,000.00 |
Common stock | $ 700,000.00 |
Retained earnings | $ 415,800.00 |
Total Liabilities and stockholders' equity | $1,347,800.00 |
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